Michelle Lapinski, Senior Advisor, Valuing Nature, The Nature Conservancy Libby Bernick, Senior Vice President, North America, Trucost Connie Hensler, Director, Corporate LCA Programs, Interface What progress have the last 12 months seen in translating the value of natural capital in a language the business world hears loud and clear? What new tools and modeling exercises are emerging, and where can one look for a reasonable beginner-level road map?

1. Are We There Yet: the State of Natural Capital
Valuation
The New Metrics of Sustainable Business 2013
Michelle Lapinski, The Nature Conservancy
Libby Bernick, Trucost
Connie Hensler, Interface

2. September, 2013
The True Cost of Carpet
Environmental Product Declaration Natural
Capital Valuation
Connie Hensler – Interface, Director, Corporate LCA Programs
Libby Bernick– Trucost, Senior Vice President, North America

5. Ray Anderson Founder of Interface

6. www.raycandersonfoundation.org
We are a powerful voice in helping champion a better world for
tomorrow’s child. As a result of our commitment, focus and influence,
future generations will inherit a world where healthy and functioning
natural systems support all life.

7. Natural Capital Valuation
Natural capital: the (under)
valued products and services
provided by ecosystems
Environmental externalities:
costs (social, abatement, etc.) or
benefits born by others.

8. Applying NCV to Interface products
• LCA data
• Public disclosure
• Third party verified
• Available for all
products

9. GROWTH in NATURAL CAPITAL
VALUATION
CORPORATIONS
SOVEREIGN
INVESTORS
NGOs
MULTI-STAKEHOLDER
GROUPS• Enterprise-wide
• Operations
• Supply Chain
• Product Category
or Brand Portfolios
• Products
• Technologies
• Site or Facility
level
• Portfolios
• Products

10. Applying NCV to Interface products
• LCA data
• Public disclosure
• Third party verified
• Available for all
products

11. Product – level Valuation Methodology
Example of damage cost application
Global Warming Cost: Production Stage
6.77 kg CO2e/m2 tile x $0.121 /kg CO2e = $0.82/m2 tile
Impact Valuation coefficient Impact Cost
Impacted receptor Receptor density (Adjustment
factors)
Terrestrial ecosystem Natural land surface %
Crops Crop mix
Health Population density
Water acidification Water surface %
Forestry Forest surface %
Damage cost Benefit transfer factor
Water consumption Water scarcity and Purchase
Parity Power
Health Income per capita
Receptor adjustment factors Benefit transfer factors
Review CML
Methodology
Define
valuation units
Define the
scope of the
valuation
Identify the
receptor
adjustment
factors
Identify the
benefit
transfer
factors
Apply factors
and aggregate
results
Acid Rain Smog Greenhouse Gases Water

12. EPD valuation results
Overall impact by Value Chain stage
Average retail price = $20/Square meter

13. The European product uses 76% more water than the
North American. However, in terms of natural capital
risk this percentage is reduced to 68%.
Ingredient A accounts for 66% of water use, but only
38% of water risk. Sourcing practices are the reason;
this material comes from United Kingdom, which has
a low water risk of water scarcity.
Regional differences in natural capital
dependency can be significant, and have
important material sourcing implications
EPD valuation results
ValuationLCA
0.00
0.10
0.20
0.30
0.40
North America Europe North America $ Europe $
m3per$
+ 76% + 68%
Water

14. Significance of different impacts
55
Product
Impacts
Global Warming has the Most Significant Impact
(in Natural Capital Valuation)
Global Warming
Water SmogAcid Rain
93%

15. Possible next steps - Interface
•Use NVC as an internal
weighting method on our
LCAs
•Additional impact
categories and inventory
items
•Additional products and
manufacturing locations

16. New Trucost Applications
 Sustainability ROI: Valuing
sustainability impacts and benefits.
 Greener Products and Technologies
• Valuation tool for measuring commodity risks
• Net benefit valuation to communicate
performance to investors and customers

17. Thank you!